Technology as a Driver for Special Risk Bancassurance

Technology as a Driver for Special Risk Bancassurance

Banks through bancassurance have a tremendous opportunity to transform the insurance landscape across Africa. With a large network of branches, huge retail customer base and wider acceptance/trust in the market compared to insurers, banks are well positioned to meet an important set of consumer needs while addressing the low insurance penetration in the market.

While banks as channels have proven ideal for retail insurance, they are yet to realize the channel’s full potential by targeting both the uninsured and their high net worth individuals and businesses. With the right technological infrastructure and strategic partnerships, bancassurance partners can design exclusive and customer-centric products in line with their customer profiles and distribution channels.

This was the emergent focus at day-two of the Turnkey sponsored 3rd Annual Africa Bancassurance Conference 2017 by Lloyds Markets which brought together an unparalleled program of compelling sessions and thought-provoking speeches. Speaking on topics such as Specialty Insurance, Marine Insurance and Agriculture Insurance these thought-leaders urged bancassurance partners to take advantage of their position to design and distribute products that are relevant to the local market.

Mohau Molefe, Head of Bancassurance for Old Mutual set out to Debunk theMyth that Specialty Insurance cannot be distributed through bancassurance. According to Molefe, this is a fallacy perpetrated by global brokers that banks cannot handle complex products like Specialty Insurance. However, he sees banks as being in a most favorable position to handle these risks as they come across them on a regular basis. Banks are also key participants in stakeholder forums, significant referral generators as well as the funders of such projects and as such Specialty Insurance is an inherent opportunity they need to pursue.

“Just make sure you have the appetite, the right skills, experience and the internal commitment to make it successful,” is Molefe’s advice to the banks. “The main point for us as Africa is to try and ensure we are keeping these risks in Africa, retaining the profits and thus growing our continent,” he added.

Kevin Okere of Gikera & Vadgama Advocates who spoke on Marine Insurance was also of the view that Marine Insurance is the next frontier for optimizing the bancassurance model. He see this especially so for Kenya as the country pursues Vision 2030 and has imports projected to reach 2.2 trillion by 2020. Kevin urged bancassurers to take advantage of the recently enacted Marine Insurance Act and align their business with Kenya’s regulatory, fiscal and economic agenda.

Agriculture Insurance was also highlighted as another area with great potential for bancassurance. According to Rahab Kariuki of Acre Africa over 80% of the farmland in Sub-Sahara Africa is managed by smallholder farmers, most of whom are susceptible to the effects of climate change, flood and drought. If this farmers are already accessing banking and credit services from the banks, she wonders why the banks are not extending their services to include insurance.

All in all technology becomes a great enabler with its ability to impact the whole insurance value chain from customer acquisitions to claims management. A good technological infrastructure will enable banks to explore their database to discover sale opportunities as well as simplify transactions for the customers buying insurance.

By leveraging technology like big data analytics, banks and insurers can be able to understand consumer preferences and behavior. With these insights, they can then design products and select distribution channels that make purchase easier and provide better customer experiences. Ultimately they will be able to differentiate themselves in a market that is becoming increasingly crowded.

Turnkey Africa, through TurnQuest Bancassurance Suite empowers bancassurance practitioners with the tools to handle complex product structures. With TurnQuest Bancassurance, our clients are able to create and roll out tailor-made, innovative products with great speed and consistency across various channels. TurnQuest Bancassurance Suite also comes with the capability to handle multiple carriers and insurance providers, diverse commission structures, monitor agent performance, cross sell and up-sell to bank customers